Volume is no promise of success: 300pg JPR report on semiconductor opportunities in handheld market

Posted: 06.05.07

Tiburon, California, June 5, 2007—Marketing and consulting firm Jon Peddie Research
today announced the release of its latest 300-page report, Handheld
Multimedia Devices 2nd Edition. The report is based on
two years of extensive research and identifies opportunities in multimedia for
semiconductor, IP, software, sensors, and tuner suppliers in handheld devices
such as mobile phones.

JPR has been studying, lecturing worldwide, and reporting on
the handheld market since 2000 and has widely canvassed the companies and
individuals in this field to obtain product information, trend data, market
sizing and forecasts, and competitive issues for the current report.

“Based on our extensive survey of hundreds of managers and
engineers in the mobile market, clearly everyone is dazzled by the volume of
handheld units shipped,” said JPR President Dr. Jon Peddie. “This is a serious
mistake that has led to the failure of projects and companies as overall market
volume is no predictor of profits or success.”

Handheld Multimedia Devices 2nd Edition identifies market consolidation of suppliers (from
44 down to 26 with more assimilations and failures expected), the unrelenting
march of Moore's Law and its impact on Co-Processors, applications processors,
media processors, and baseband processors, as well as the role of IP in the
design and development of these devices. Some of the conclusions and forecasts
made in the report are:

• Opportunities are extremely limited for
semiconductor startups, and all but closed to entrepreneurs.

• Critical mass in engineering and IP represents
major barriers to entry.

• Co-processors will be assimilated by SoCs.

• No killer app per se, but TV on mobile devices
looks very promising.

• Open standards and APIs will enable the market.

• Low-cost phones are not the highest growth
market by any metric.

• Game development will finally take off in
2007—many acquisitions of game developer companies are expected.

“The
window is closed for startups,” says Peddie. “The operators, handset
manufacturers, and even the ODMs want to deal with big firms that will
be able to supply large volumes of parts over many years; young
companies without a solid track record present too much of a gamble.”

Sales
forecasts (in millions of units worldwide) of the three segments
listed above.

CAGR 2006 2007 2008 2009 2010

High End 2006-10 CAGR: 25% 111.8 152.4 192.2 232.8 277.2

Midrange 2006-10 CAGR: 16% 297.9 349.0 404.5 469.8 532.9

Low End 2006-10 CAGR: -1% 482.6 483.0 480.0 472.9 464.5

“While
the industry sees great promise for selling mobile phones into high-population
emerging markets, it is vital to remember that median monthly incomes
are $40 or less, “says Peddie. “It's not exactly the pot of gold some
people think it is, even if you can build a $30 phone, but there are
indeed opportunities in low-cost phones.”

JPR's Handheld Multimedia Devices 2nd Edition, contains 300
pages, 39 tables, and 167 diagrams and illustrations, an
extensive appendix and company profiles, and is available
for $4,999 for an electronic version.